THE Bureau of Customs (BOC) plans to start this April the audit of pork and chicken imports that came into the country last year, in order to look into undervaluation, among other customs-compliance issues.
Customs Assistant Commissioner and spokesperson Atty. Vincent Philip C. Maronilla, who heads the bureau’s Post-Clearance Audit Group (PCAG), told the BusinessMirror that Customs Commissioner Rey Leonardo B. Guerrero has already ordered them to intensify their post-clearance audit on agricultural products. Maronilla said they are looking at initially auditing last year’s shipments of 40 pork importers and 20 chicken importers.
This audit, he said, will be lumped together with their audit of importers of mechanically deboned meat (MDM) of chicken who paid a lower tariff of 5 percent instead of the 40-percent tariff imposed by the Bureau of Customs for three months back in 2019 prior to the issuance of an executive order imposing the lower tariff.
“[We’ll include undervaluation] in our MDM [mechanically deboned meat] audit and we are going to profile certain importers that are under the red flag when it comes to undervaluation,” Maronilla told the BusinessMirror. “We will also check compliance [on the] Minimum Access Volume (MAV), [on their] SPS (Sanitary and Phytosanitary) requirements if these correspond to the volume given to them.”
“This is in compliance with the directive of the House Ways and Means Committee to look into issues of agricultural smuggling,” he added.
Undervaluation happens when the declared value fails to fully disclose the price actually paid or payable or any dutiable adjustment to the price actually paid or payable, or when an incorrect valuation method is used or the valuation rules are not observed. This results in discrepancy in duty and tax to be paid between what is legally determined as the correct value against the declared value.
The Customs official said they are hoping to issue the audit notification letters (ANLs) to importers in April.
“Yes, we’re just completing the list and we’re only at the recommendation [level in] the issuance of ANLs” with the BoC Commissioner, Maronilla told the BusinessMirror.
If the ANLs are issued by April, Maronilla said they are targeting to finish the audit of pork and chicken importers on undervaluation and other customs compliance issues by August or September.
He clarified an importer receiving an ANL doesn’t automatically mean he or she committed undervaluation.
Despite the allegations from the Agricultural Sector Alliance of the Philippines (AGAP) and the Pork Producers of the Philippines (ProPork) that there is undervaluation and misdeclaration of agricultural products, Maronilla said “the BOC has yet to get firm evidence to prove there is indeed a violation on the part of the importers.”
“We will look into their allegations and the basis of their allegations and we will consider that in the audit,” Maronilla told the BusinessMirror.
Last month, Finance Secretary Carlos G. Dominguez III ordered the BOC to tighten its watch on pork importers trying to mis-declare or misclassify shipments to avoid correct payments of tariffs as the country reels from a pork supply shortfall that resulted in the spike in pork prices.
Dominguez, who served as agriculture secretary under President Corazon Aquino, warned that traders may misclassify pork imports once the new MAV allocations and tariff rates are approved by the President.
However, the Senate adopted a resolution last Monday asking President Duterte to declare a state of national emergency due to the African Swine Fever. The Upper Chamber also rejected the twin proposals to slash pork tariffs while increasing the MAV for pork imports.
The issue of technical smuggling of pork imports was also raised during the Senate’s plenary session with senators pointing out that unscrupulous importers are already benefitting from misdeclaring good, or prime, pork cuts as pork offal to avert paying higher tariffs.